Polyester Market Returning to the Winter · with 69.9 billion yuan last year and 50.1 billion yuan the year before last. The figure for Q3 2012 is expected to increase further. Generally

Polyester Market Returning to the Winter

Zhang Youding

Deputy Section Chief

Synthetic Fiber Division of Sinopec Chemical Products Sales Company

1

9th China International Polyester & Intermediates Forum

化工事业部

化工销售分公司合成纤维处化工销售分公司合成纤维处化工销售分公司合成纤维处化工销售分公司合成纤维处

化工销售化工销售化工销售化工销售Chemical Products Sales Company

Polyester Market Returning to the Winter

November 2012 Shanghai

Contents

2.

3.

Oversupply pressure increases in 2012

Limited highlights in 2013 polyester fiber market

1. Polyester fiber demand growth slows obviously in 2012

4. Strategies and suggestions under the tough situation

2


Cotton spinningstable to soft?

� China’s spinning capacity

exceeds 50% of the world total,

owning 120 million spindles for

ring spinning and 2.32 million

rotors for rotor spinning.

� In 2011, China’s spun yarn

production increased by 12.43

percent year on year, slightly

lower than that of a year earlier,

and the respective growths of

chemical fiber yarn and blended

yarn were at 15.72 percent and

13.55 percent.

� In Jan-Sep 2012, China’s spun

yarn production totaled 23.725

million tons, up 12.9 percent year

on year.

Spun yarn production and structure change from 2011 to date in China (above designated size)

1. Polyester fiber demand growth slows obviously in 2012—— production slackens

� In Jan-Sep 2012, China’s fabric production increased by 5.26 percent year on year, indicating a

further decrease in growth rate; hereinto, that of chemical fiber fabric was at 8.1 percent.

� In the same period, apparel production was around 20 billion pieces, up 6.56 percent.


3


Growth eases obviously

� In Jan-Sep 2012, the domestic

soft drink output was nearly

100 million tons, up 8.35%

year on year, but the growth

rate was 10.5 percentage points

lower from a year before.

� Carbonated beverage output

dropped by 14.5% compared

with the growth of 28.9% of

the same period last year.

� In the past few years, the

average growth rate of

domestic beverage was above

20 percent.

China’s beverage production in recent years (10,000 tons)


200

400

600

800

1000

1200

1400

1600

JAN

FE

B

MA

R

AP

R

MA

Y

JUN

JUL

AU

G

SE

P

OC

T

NO

V

DE

C

2008 2009 2010 2011 2012

6

� In the first three quarters, the retail sales of textiles and apparels increased 17.8 percent year on year,

7 percentage points lower over the same period last year.

� Meanwhile, CPI for clothing rose by 3.4 percent.

1. Polyester fiber demand growth slows obviously in 2012—— domestic sales shrinks

Retail sales of textiles and apparels in China from 2011 to date

Y-o-y growth (%) Retail sales (billion yuan)

4


7

� In the first three quarters, retail sales of large-size textile and apparel retailers in China increased 11.2 percent year on year, 14.5 percentage points lower from a year earlier.

� Meantime, the growth of sales volume was less than 2 percent, 3.7 percentage points lower, indicating persistent and obvious declines in growth rate.

1. Polyester fiber demand growth slows obviously in 2012—— domestic sales shrinks

Sales growths of 100 large-size textile & apparel retailers in Jan-Sep 2012

Value (left), Volume (right)

1. Polyester fiber demand growth slows obviously in 2012—— export growth stagnates

Export growth stagnates

In Jan-Sep 2012, the

cumulative export value of

textiles and apparels in

China only increased by

0.54 percent year on year.

It is estimated that the

annual growth rate will be

basically equal to the above

number.

Export value of textiles & apparels in recent years ($ billion)

0

50

100

150

200

250

300

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Export value

Y-o-y growth

5


� Export to Europe saw a negative growth of minus 11.8 percent; hereinto, the export growth to EU-15

was at minus 15.4 percent, with that to Italy topping at minus 24.7 percent.

� Separately, the export growths to the US and Japan were at 3.4 percent and 1.0 percent respectively.

� These figures all posted declines compared with that in Q1.

Textile & apparel export by destination in Jan-Aug 2012


� Export volume of most products decreased.

� The decreases of chemical-fiber-based products were smaller.

-30%-25%-20%-15%-10%-5%0%5%

10%15%

Knitt

ed

gar

ment …

Oth

er f

abric

s

Oth

er g

arm

ents

Chem

ical f

iber

yarn

Cott

on fab

ric

Spun y

arn

Cott

on y

arn

CF

knitt

ed

garm

ent

CF

wove

n fa

bric

Oth

er y

arn

s

Nonw

ove

n

Carp

et

Knitt

ed

garm

ents

CF

wo

ven g

arm

ent

CY

knitt

ed

garm

ent

Wove

n g

arm

ent

Wool w

ove

n f

abric

Silk

yarn

Cott

on w

ove

n …

Silk

wove

n g

arm

ent

Silk

fabric

Fur g

arm

ent

Wove

n g

arm

ent …

Wool y

arn

Wool w

ove

n …

Wool k

nitt

ed

…

Sued

e g

arm

ent

Leath

er g

arm

ent

Silk

kn

itted

garm

ent

Textile & apparel export volume by product in Jan-Aug 2012


6


� Export value of most products still rose year on year.

� The price hikes of chemical fiber products were relatively weaker.

-20%

-10%

0%

10%

20%

30%

40%

Silk k

nitte

d g

arm

en

t

Su

ed

e g

arm

en

t

Woo

l w

oven

garm

ent

Wo

ol yarn

Wo

ol kn

itte

d g

arm

en

t

Fur

garm

en

t

Carp

et

Co

tto

n k

nitte

d g

arm

ent

Oth

er

garm

en

ts

Knitte

d g

arm

en

t

Leath

er

garm

ent

Silk fabri

c

Silk w

oven

garm

en

t

No

nw

oven

Wo

ve

n g

arm

en

t …

CF

knitte

d g

arm

en

t

Woo

l w

oven

fab

ric

CF

woven

fab

ric

Co

tto

n w

ove

n g

arm

en

t

Wo

ve

n g

arm

en

t …

CF

wo

ven g

arm

en

t

Kn

itte

d g

arm

ent …

Oth

er

yarn

s

Oth

er

fab

rics

Sp

un

yarn

Cott

on

fab

ric

Th

read

Ch

em

ical fib

er

yarn

Co

tto

n y

arn

Textile & apparel export price by product in Jan-Aug 2012


Direct export eases

� In 2011, the export volume

of polyester products

exceeded 2.95 million tons,

up around 0.6 million tons or


� In Jan-Sep 2012, the export

volume amounted to 2.45

million tons, up 0.12 million

tons or 5.13 percent year on

year.

� Export growths saw

recoveries recently, as

exports declined notably

during the second half of last

year.

Polyester products export from 2010 to date

kt


7


� According to the data from 87 listed textile enterprises, the stockpile amounted to 73.2 billion yuan in their interim reports, compared

with 69.9 billion yuan last year and 50.1 billion yuan the year before last. The figure for Q3 2012 is expected to increase further.

� Generally speaking, the stockpiles of public clothing shops is 2-4 times more than their sales values, with higher ones seen at 6 or even

9 times more.

1. Polyester fiber demand growth slows obviously in 2012—— climate cools

Stockpile of relevant industries by the end of Jul 2012 (stock to sales value of that month)

0%

50%

100%

150%

200%

250%

300%

Spun yarn Nonwoven Fabric Knitgoods Apparel/accessories Listed firms

？

Inventory of some listed textile & apparel companies by the end of Sep 2012


CompanyBeginning inventory (bil. yuan)

Inventory at end Q3 (bil. yuan)

ChangeProportion of

inventory to Q3 output value

Inventory worth (month, est.)

Meters/bonwe 2.56 2.199 -14.10% 32.2% 2.9

Semir 1.096 1.439 31.30% 29.1% 2.6

Hongdou Industry 3.637 3.978 9.38% 270.4% 24.3

Joeone 0.722 0.779 7.89% 38.2% 3.4

Septwolves 0.642 0.736 14.64% 28.3% 2.5

Baoxiniao Group 0.511 0.625 22.31% 34.3% 3.1

Tianshan Textile 0.238 0.254 6.72% 123.3% 11.1

Shanshan Corp. 0.815 0.952 16.81% 34.3% 3.1

Sinoer 0.312 0.388 24.36% 45.3% 4.1

Langsha Holding 0.219 0.245 11.87% 99.6% 9.0

Toread 0.178 0.336 88.76% 43.2% 3.9

Total (apparel)

10.93 11.931 9.16% 48.5% 4.4

Luolai Home Textile 0.517 0.684 32.30% 33.9% 3.1

Mendale 0.384 0.528 37.50% 55.3% 5.0

Fuanna 0.517 0.46 -11.03% 40.6% 3.7

Total (home textiles)

1.418 1.672 17.91% 40.7% 3.7

8


Run rate decreases

� In 2012, the operating

rate of polyester units

slipped by 3 percentage

points to 82 percent.

� Meantime, that of

BGPET chip and PFY

units dropped by 7-8

percentage points.

Operating rate of polyester industry in Chin in recent years

2011


50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

Polymer PET Resin PSF PF

2008 2009 2010 2011 2012

8000

9000

10000

11000

12000

13000

14000

15000

16000

17000

2010 3 5 7 9 11

2011 3 5 7 9 11

2012 3 5 7 9

PET chip

1.4D PSF

POY150D

FDY150D

Y/T

Price trend of polyester products from 2010 to date Prices return normal

� In Jan-Oct 2012, the

average price for Brent

crude futures was still

around $112/bbl, but

the average price for

polyester products

dropped by around 17

percent.

� The current price levels

are slightly below the

normal ones.


9


� Profitability of major products weakened obviously, with cash flows lowering from the highs.

� Differentiated products with high added values also failed to escape, with some even seeing larger markdowns than

regular products.

� Downstream sectors also performed poorly, such as chip-based spinning sector, film sector, etc.

Cash flow of major polyester products from 2009 to dateY/T

-400

-200

0

200

400

600

800

1000

1200

1400

2009 2010 2011 2012

PET chip

PSF 1.4D

POY 150D

FDY 150D


Major indicators of polyester industry in recent years (%) Major indicators worsen

� Gross margin and profit

margin of polyester

industry dropped sharply,

while stockpile and the

proportion of loss-

incurring enterprises rose.

YearGross

margin

Three expenses to sales

Profit margin

Extra-ordinary items to

sales

Stock ratio

Export ratio

Loss-incurring

rate

2009 5.45 3.59 2.18 -0.32 4.34 7.26 24.31

2010 8.74 3.47 6.15 -0.88 4.22 7.36 9.43

2011 8.62 3.47 5.55 -0.4 4.25 6.63 12.4

Jan-Jul 2012

5.46 3.94 2.05 -0.53 9.44 4.8 32.05


10


A new round of rapid expansions

� From 2011 to 2013, China’s

polyester industry will see a

new round of rapid capacity

expansion, with the newly

added capacities expected to

reach 4-6 million tons every

year.

� By the end of 2012, China’s

polyester capacity is predicted

to reach around 38.5 million

tons per year.

� By the end of 2013, China’s

polyester capacity is expected

to reach around 43 million tons

per year.

Polyester capacity expansions in China in recent years(10,000 tons per year)

2. Oversupply pressure increases in 2012—— capacity expansion

0

100

200

300

400

500

600

700

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

1000

2000

3000

4000

5000

6000

Expansion Capacity


Expansion to last one year at most?

� Newly added capacities

amount to around 5.5-6.0

million tons in 2012

according to the estimate, up

by 18 percent year on year.

� In the first three quarters, 4.5

million tons/year capacities

came on stream. Many of

them produced chips at first,

and then PFY or PSF lines

were gradually added.

� Due to the lag of matched

lines, chip availability on the

market increased sharply.

New polyester capacities in China in 2012(10,000 tons per year)

Q2 Q3 Q4Q1

0

10

20

30

40

50

Ta

ica

ngC

hang

le

Ha

inin

gW

ank

aiN

o.2

Chi

na R

eso

urce

s (C

hang

zho

u) N

o.3

Gua

ngdo

ng T

aib

ao

Guo

wan

gH

igh-

tech

N

o.2

Wu

jiang

Xin

min

No

.2

Zhe

jiang

Hen

gyi

(Lin

jiang

)

Zhe

jiang

Xia

ngsh

eng

Suq

ian

No

.1

Zhe

jiang

To

ngku

n

Zhe

jiang

Uni

ful

Wu

jiang

Xin

min

No

.3

Zhe

jiang

Ho

ngen

Chi

na R

eso

urce

s (Z

huha

i) N

o.5

11


Extremely high-speed expansions

� In 2012, newly added

BGPET resin capacity

amounted to 1.7 million

tons so far, pushing the

total capacity up by 35

percent to 6.6 million

tons per year.

� Some of these new

capacity might produce

FGPET chips at earlier

stage after the startup.

BGPET resin expansion in China in recent years(10,000 tons per year)


0

20

40

60

80

100

120

140

160

180

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

200

400

600

800

1000

1200

Expansion Capacity

Considerable expansion as well

� In 2012, as some plants

failed to install winders

in time, the actual

capacity expansion of

PFY only amounted to 3

million tons so far, and

the total capacity is

expected to reach 27.5

million tons per year by

the end of 2012.

� From 2011 to 2013, the

average annual capacity

expansion is estimated at

above 3.5 million tons.

PFY expansion in China in recent years (10,000 tons per year)


0

50

100

150

200

250

300

350

400

450

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

500

1000

1500

2000

2500

3000

3500

4000

Expansion Capacity

12


History recurs

� In 2012, direct-melt-

spinning PSF capacity is

expected to reach 6

million tons per year, up


� In the meantime,

recycled polyester fiber

capacity is expected to

exceed 7 million tons per

year.

PSF expansion in China in recent years (10,000 tons per year)

-20

0

20

40

60

80

100

120

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

100

200

300

400

500

600

700

800

Expansion Capacity


Output increase brought by capacity expansion

� In 2013, the polyester

fiber production is

predicted to reach 30

million tons in China, up

2.5 million tons year on

year.

� Although the growth rate

posts a decline, the actual

increased volume is

major.

Polyester fiber production from 2000 to 2015 (10 thousand tons, * for estimates)

0

500

1000

1500

2000

2500

3000

3500

4000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

*

2013

*

2014

*

2015

* 0%

5%

10%

15%

20%

25%

30%


Output Growth

13


Loose cotton supply

� In the 2011/12 marketing year,

China’s cotton production

amounted to around 6.6 million

tons, up 10.7 percent from the

same period last year, indicating a

gap of around 3 million tons.

However, in Jan-Sep 2012, the

cotton import in China was nearly

4.03 million tons, up 107 percent

year on year.

� In the 2012/13 marketing year,

the cotton planted area and

production are likely to decrease

by 5 percent; hereinto, the planted

area is expected to fall by around

6 percent, while the production is

predicted to drop to 6.3 million

tons or so.

Cotton production and consumption in China and worldwide in recent years (million tons)

Worldwide

China

2. Oversupply pressure increases in 2012—— cotton harvest

�In 2013, world economy is expected to see a lower growth rate than in 2012

� The US will remain the leading force of world economy growth given its capability in tech innovation, though a significant growth is not likely to be achieved in the near future（IMF=2.1%）.

� Euro Zone Economy may enter a recession instead of further deterioration. （IMF=0.2%）

– The €120-billion economy stimulating package brought by EU may prevent the crisis from upgrading.

– Larger investment would be needed to support the growth of traditional manufacturing industry of European countries.

� Japan will continue to see slow economic growth

– An aging city and negative population growth are depriving the country of domestic demand

– Unstable government performance is unlikely to improve in the near future

– Debt crisis in Europe resulted in Yen appreciation, a negative factor for export

– Slow recovery from the earthquake 2011 accompanied with closed nuclear power plant and tax increase

III. Limited highlights in 2013 polyester fiber market — economic environment

14


27

�China may have a harder time in 2013 with challenges accompanied with opportunities

� Economic growth goes slower but more stable

– The target de-stocking is close to be achieved, with the task of de-capacity remaining

– As the highlight of H2 2012, investment in infrastructure could provide little more than a short-term push

– Real estate market is seeing signs of improvement, while pressure from policies are expected to remain

� Macroeconomic control from policies may loosen a bit

– Presetting and fine adjustment are expected to have more room to play in monetary policies

– China will continue to pursue relatively positive financial policies, though unlikely to go much further in this direction

– There will still be many efforts to stimulate domestic consumption

� Economic growth is expected to see more difficulties in 2013

– Shrinking trade surplus, dollar appreciation and CNY depreciating by small range

– Stable fixed assets investment and slightly increasing domestic consumption growth expected to support GDP to see a rollover from 2012

– In the medium term, the potential growth rate of China economy may descend to around 7.0% if no further major stimulating actions taken by the government

III. Limited highlights in 2013 polyester fiber market — industrial environment

� China’s accession to WTO admitted on 10 Nov 2001

� China has witnessed significant development in manufacturing industry, but is losing its edge now.

� “MADE IN CHINA” can be found everywhere around the world

� Vietnam took the place of China as the largest OEM base of Nike shoes in 2010.

� Rising costs meet increasing trading barriers

� Development of China Textile Industry

� The export value of textile in 2011 is around $212 billion, nearly a quadruple compared with the $53.2

billion in 2001.

� Mill consumption of fibers in 2011 totals 45 million tons, 3.3 times of the 13.6 million ton in 2001.

� Output of apparel in 2011 is around 25.4 billion pieces, 3.3 times of the 7.8 billion pieces in 2001.

� Development of China Polyester Industry

� Polyester capacity totaled around 33 million tons/year in 2011, increasing by almost 3 times from the

8.8 million tons/year in 2001.

�End of the “Golden Age”


15


Capacities increasing at a fast and persistent pace

� Around 5 million tons of

new annual capacities are

expected in 2013.

� Besides PFY, BGPET

and PSF are also

expected to see increase.

Planned new polyester capacities in China in 2013 (kt/year)

Q3Q1

0

100

200

300

400

500

Xin

feng

min

g#5

Xin

feng

min

g#6

Shandong

Shandong

Shandong

Shandong W

anjie

#2

South

South

South

South E

astGrid

Grid

Grid

Grid

Yiz

heng

CF

15#

Fuj

ian

Bill

ion

San

fang

xian

g

Hua

xian

g(C

hina

)

Fuj

ian

Fen

ghua

Zhe

jiang

Tia

nyua

n

Q2 Q4


Situation of invested projects of textile industry during Jan-Aug 2012 (%)

16.2113.87 14.86

40.84

14.32 15.53

-6.99-9.01 -9.92

12.89

-6.19

23.68

-20

-10

0

10

20

30

40

50

Textile Industry Textiles Cotton spinning,printing/dyeing

Wool spinning,printing/dyeing

Apparel Polyester fiber

Completed Started

�CNY23.65 billion completed in chemical fiber and knitting & Weaving, CNY48.27 in

textiles, accounting for 9.1% and18.7% respectively of completed investment of the

industry total.


16


�There are expected to be more increase in POY capacities as suppliers are suffering great

loss from FDY, indicating that the loss is well likely to also occur with POY in the future.

FDY (melt-direct-spun) POY (melt-direct-spun)

Newly added 990-1,160kt 825-890kt

Increase rate 18% 9.8%


Main locations of chip-based spinning capacities in China

�Investment in chip-based spinning capacities has withered significantly, so there will be

little increase in numbers of chip spinning plants in the near future.

Other places inJiangsu, 18%

Changshu, 7%

Other places inZhejiang, 7%

Cixi, 18%Zhuji, 9%

Shaoxing, 20%

Xiaoshan, 18%

Guangdong,3%


17


Increase in numbers of draw-texturing machines in China (unit: set)

�Increase rate has been falling significantly since 2011, and is expected to touch the bottom

in 2013. In 2014, the rate may pick up to 5.5-6.0% and hold stable for some time.

0

200

400

600

800

1000

1200

1400

1600

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013* 2014* 2015*

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Added No.... Increase rate


Proportion of major Chinese producers’ capacities (%)

�There is a large number of suppliers dominated by the market mechanism. However, with

regard to industrial majors...

Jiangsu Hengli4.25%

Zhejiang Tongkun4.85%

Zhejiang Rongsheng2.55%

Xianglu Tenglong1.55%

Others, 67%Total of seven majors

33%

Zhejiang Hengyi6.15%

Sinopec8.50%

Sanfangxiang5.15%


18


35

Sharp decrease of trading value in autumn

� The trading value of the

Fair in autumn 2012 fell

by 9.3% from the last

session.

� Trading value of textile

and apparel fell by 15.5%

from the last session.

� There are diverges in

opinions regarding these

data.

Trading Values in the Canton Fair ($100 million)

305

343349

368.6379

360.3

326.8315.5

382.3374.4

322.2

340.6

363.9

262.3

36.540.5

45.6 46.541.3 41.5

35.133.636.5

49.956.3758.4

54.152.1

200

250

300

350

400

2006spring

2006autumn

2007spring

2007autumn

2008spring

2008autumn

2009spring

2009autumn

2010spring

2010autumn

2011spring

2011autumn

2012spring

2012autumn

0

20

40

60

80

100


� New stimulating policies of Europe and the US?

� Crude oil prices holding firm or inching down?

� Consumption speed of inventory (end-users’ inventory in particular)?

� Possibility of a lot of suppliers quitting?

� Impact from sales promotion of new plants?

� Improvement in cotton supply/demand fundamental in new marketing year?

� Significant changes in China economic policies?

� Speculators missing no chance to hype the market by utilizing futures and other tools.

� Unexpected accidents such as hurricane and explosion

�Market is unlikely to see remarkable volatility as neither push nor pull factors

could gain the upper hand at present.

III. Limited highlights in 2013 polyester fiber market — major factors

19


What can we learn from sewing thread market?

Indexes of China sewing thread market

15500

16000

16500

17000

17500

18000

18500

19000

19500

20000

3-2

3-16

3-30

4-13

4-27

5-11

5-25 6-

8

6-22 7-

6

7-20 8-

3

8-17

8-31

9-14

9-28

10-1

9

11-2

50

75

100

125

150

175

200

Price Run Rate Inventory

III. Limited highlights in 2013 polyester fiber market — major factors

Prices Tracking Cost

� Prices for polyester

products are at a

comparatively low level

� Prices mainly tracked

cost changes

� Prices fluctuate within a

small range tracking

feedstock when crude oil

price is stable

� A high coherence with

PTA price trend

Price trends of SD chip, PSF and PFY since 2006 (Yuan/ton)

7000

9000

11000

13000

15000

17000

2006

2007

2008

2009

2010

2011

2012

2013F

SD chip 1.4D PSF

75D PFY

III. Limited highlights in 2013 polyester fiber market — forecast

20


� Margin of most products are at or below break-even point

� Availability won’t completely mirror capacity increase given lower run rates

� More plants suffering losses

� Most plants struggle to maintain operation, while a few chose or were forced to shut

down

� … …

�Plenty availability and low costs of raw materials may help downstream textile

enterprises to achieve a slow recovery.


A slow downstream recovery?

Price changes of grey fabrics T/C 65/35 45×45 110×76 (yuan/meter)

3.723.43

4.87

6.2

5.01

4.5

2

2.5

3

3.5

4

4.5

5

5.5

6

6.5

7

2008

2009

2010

2011

2012

2013

*

� Lower raw material costs

� Economic growth going

stable

� Withering investment

� ……


21


IV. Strategies and suggestions under the tough situation— inside-industry cooperation

Lower rates to reduce loss

� Polyester resin/fiber market will again face a long tough time

� Low rates to cope with supply surplus —few suppliers to entirely shut down

� Blind price competition ruins enterprise itself as well as the whole industry and downstream consumers

� Cooperation inside the industry is a necessity

1

Sustained supply to maintain customers

� Sustain supply to regular customers

� A higher proportion of direct-supply customers and fewer supplies to distributors

� Before shutdown, stock up certain inventory for customers

� Notice of shutdown to customers in advance

2

Be a term feedstock supplier

� Stable supply helps improve competitiveness

� Term suppliers facilitate feedstock sourcing

� Stable product quality

� Lower feedstock inventory to save costs

� Better discounts, better services

Product innovation

� China is losing its edge of low labor costs to neighboring countries

� Innovation is the life of products

� Face the challenges and upgrade your products

� Work with your feedstock suppliers to catch up with market demand changes

� Brand building is a necessity

3

4

IV. Strategies and suggestions under the tough situation— downstream consumers

22


� Sinopec provides you a wide scope of differentiated specs of high quality that add more value to your products.

� Sinopec provides you all-round customer services to facilitate your purchasing.

Sales Volume of Sinopec’s PSF (by specs) in 2011Z

W10

1

ZW

310

ZW

119

WF

310

FR

358

ZW

102

ZW

114

FR

211

YT

331

WF

320

WF

313

ZW

11A

ZW

113

ZW

110

ZW

100

ZW

122

FR

200

ZW

116

FR

711

ZW

341

WF

311

ZW

117

FR

361

ZW

111

ZW

125

WF

341

WF

323A

ZW

160

QY

18

Sales Vol.

IV. Strategies and suggestions under the tough situation— Sinopec

E-mail: [email protected]

Documents

Polyester Market Returning to the Winter · with 69.9 billion yuan last year and 50.1 billion yuan the year before last. The figure for Q3 2012 is expected to increase further. Generally